A blog for the socially and politically conscious, written by a young, gay activist who strongly believes in equality and justice.

Wednesday, 17 February 2010

We must learn from Greek economy tragedy

Almost a third of public sector bosses are planning to cut jobs in the first three months of this year. A report by the Chartered Institute of Personnel and Development says the jobs market is “on the ropes” and the outlook is particularly “bleak” in the public sector. Alan Downey is head of public sector at KPMG business advisers, which helped with the research. He said, “It is now only a matter of time before we are faced with the deepest and most prolonged cuts in public expenditure that anyone can remember.” Birmingham council began a jobs cull last week. It announced plans to get rid of 2,000 workers in the next 12 months in a bid to cut £75 million from its budget. That’s in addition to the 800 posts that were slashed this financial year. “These jobs cuts will hit the most vulnerable hardest, with children’s daycare and elderly peoples’ homes earmarked for closure,” says Nick Burke, a Unison union shop steward in the council’s social services department. Even services that act as a safety net and help prevent those in bad situations from facing truly terrible ones are in the firing line. The union cannot allow this to happen. Alongside service users and the public, we have to launch the most determined campaign—and quickly too, before resignation sets in.”

The pressure on Greek workers intensified in the days following last week’s strike. Both German chancellor Angela Merkel and the European Central Bank (ECB) demanded the Greek government increased the attacks by adding measures such as a 1 to 2 percent increase in VAT and further public sector wage cuts. Merkel is refusing any assistance to Greece unless workers suffer. A top German diplomat said, “Germany cannot justify its taxpayers having to finance the lovely lives of the Greeks.” Of course, Greek workers do not have “lovely lives”, and there were no scruples about handing billions to bankers who genuinely have luxury lifestyles. The president of the ECB Jean-Claude Trichet put forward further calls for Greece “to take the extra measures that will be necessary to make credible their turnaround plan”. His message was spelled out by ECB chief economist J├╝rgen Stark who openly called for lower wages on the basis that “Greece has lost its ability to compete on the basis of price. That is something it will have to quickly come to grips with.”

The consistent propaganda against Greek workers is having an effect. A poll for the newspaper Bild am Sonntag found that 53 percent of Germans wanted Greece to be expelled from the euro. The importance of the Greek events was underlined by Will Hutton in the Observer last weekend. He speculated that if the EU forced Greece out of the eurozone then, “Its new independent currency will collapse; its interest rates will soar; its public debts will become unfinanceable. It really will default on its debt as it has so frequently in the past. “It will slide back into being a failed state – with a military coup one all too possible response to the crisis.” The Greek workers who struck and marched last week are our sisters and brothers in a crucial battle. At stake is who will pay for the crisis, and who will meet the bill for the bailout of the bankers.

The Greek banners caught the spirit of revolt – “No to the capitalist parasites, wealth belongs to the workers”, and “The workers’ answer is war on the capitalists”. Several read, “We are not Ireland, we will resist”. The Irish government, aided by compliant union leaders, is imposing a 20 percent wage cut in the public sector, tax increases and welfare cuts. Greek workers are determined to fight. They called their demonstrations a “river of fury”. One large banner carried by finance ministry workers proclaimed, “Workers will cancel the plans of the government and the European Union (EU) carried through with the collusion of the union leaders and the media.” Trade unionists, students, pensioners, unorganised workers and unemployed people gathered in the centre of Athens from 4am to prepare for the protests. Later in the day a Times newspaper reporter noted, “Tens of thousands of strikers chanted ‘Traitors! Traitors!’ in front of the Greek parliament.” This is an early confrontation in what will be a long war – in Greece, throughout Europe, and across the world.

Bosses and politicians want Greek workers to swallow huge pay cuts, a rise of between two and seven years in the age at which they get their pension, hundreds of thousands of job losses in the public sector and severe attacks on public services. The pressure is coming simultaneously from three sources – the government, the international bankers and the EU. The Pasok (Labour-type) government of prime minister George Papandreou was elected on a promise to protect workers from the worst aspect of the crisis. But it is forcing through bitter cuts. Reformist politicians, because they will not confront the system, are powerless when the crisis is this deep. The bankers say the Greek economy will be starved of funds and shunned from credit unless the public sector is slashed and workers forced to accept big cuts in their living standards. Already the government has to offer interest rates of 6 or 7 percent to persuade bankers to buy its bonds so that it can cover debt interest payments. That’s 3 percent more than the German government has to pay.

If the bankers decide the Greek government is not prosecuting war against the workers sufficiently strongly then the bonds will not find buyers, and the government will not be able to pay its debts. The EU leaders, backed by the “expertise” of the International Monetary Fund, have made it clear that the cuts must go through – whatever the Greek people or their government decide. At times of crisis, democracy goes out the window. The EU will act as the bailiff, collecting the debts, while those who really owe the money slip away with their loot intact. EU economic commissioner Olli Rehn said last week, “The critical lesson from this crisis is that we urgently need deeper and broader surveillance of economic policies.” He added that the European Commission “will soon come forward with proposals to further strengthen the coordination and surveillance of national economic policies within the euro area.” Some British political leaders congratulate themselves that they have avoided the Greek road because they are not in the euro. But they are like mediaeval leaders who believed bonfires would keep away the plague.

The Guardian asked recently, “Where will the next currency explosion occur? Might it be in Britain where the scale of budget deficits could threaten an eventual credit re-rating and lead to massive currency speculation against sterling?” The Telegraph added, “The PIGS (Portugal, Italy, Greece and Spain) are old hat. The new acronym on trading floors for possible dominoes if Greece should fall is STUPID (Spain, Turkey, UK, Portugal, Italy, Dubai).” Economic historian Niall Ferguson, in a Financial Times column headlined “A Greek Crisis is Coming to America,” wrote, “For the world’s biggest economy, the US, the day of reckoning still seems reassuringly remote.“The worse things get in the eurozone, the more the US dollar rallies as nervous investors park their cash in the ‘safe haven’ of American government debt. “This effect may persist for some months. Yet even a casual look at the fiscal position of the federal government (not to mention the states) makes a nonsense of the phrase ‘safe haven’. US government debt is a safe haven the way Pearl Harbour was a safe haven in 1941.”

Politicians may hope that a stabilisation plan agreed between the European Union and the Greek government will stem the immediate crisis. But increasingly people are nursing a different kind of hope – that resistance in Greece can spread to show a way out of the crisis where the rich pay. I think the government will shift its arguments after the European Union deal. It will now say that Greece is not alone and that there is a general battle taking place to defend Europe from US speculators. This, they say, means we have to accept cuts to stop the crisis spreading across Europe. I don’t think these arguments will have much effect. Greek workers are prepared to fight. Next week’s general strike will be a key moment in our resistance. it's about time the working class stopped resisting the anti-capitalist mood hanging in the air across Europe; hopefully Greece will set the stage for this momentous socialist revolution we have all been hoping and waiting for. But we must first support the struggles of the Greek people before building a socialist movement spreading across Europe, and eventually on an international level.

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